Reply to: Bank of England to temporarily finance UK government spending

[DodgyAccountant]

Cant’t work in modern world

1944 - Bretton Woods

to

15/08/1971 - Nixon 'temporarily' suspends convertability of USD to gold

[scooterscot]

One danger of fiat money is that governments will print too much of it, resulting in hyperinflation"

Just beware when Rishi Sunak starts scattering his endless supply of crisp fresh £50 notes over our financial problems like it was confetti.

Before that can happen though, there's a need to increase the physical money supply. Before that time, we're more likely to have deflation. A lot of it. People want cash, can't get it (see below) then this results in people not spending it. You can thank the Tories in the mid-80's for bank deregulation for the pickle we're in now.

'Money Supply M1 in the United Kingdom increased to 1835526 GBP Million in February from 1814637 GBP Million in January of 2020.'

'Money Supply M2 in the United Kingdom increased to 2472269 GBP Million in February from 2471137 GBP Million in January of 2020.'


So a difference of £0.6 trillion that does not actually exist but a computer in the BoE says it does. Crt-Alt-Del, that'll fix it.

[AtW]

The Bitcoin standard it is then!

Tulipcoins can’t work either, obviously

[CheeseSlice]

Interesting story from Reuters:

Bank of England agrees to finance UK government if markets turn sour - Reuters

From Investopedia: "Fiat money is government-issued currency that isn't backed by a commodity such as gold. Fiat money gives governments' central banks greater control over the economy because they control how much currency is printed. One danger of fiat money is that governments will print too much of it, resulting in hyperinflation"

Just beware when Rishi Sunak starts scattering his endless supply of crisp fresh £50 notes over our financial problems like it was confetti.

[NigelJK]

<old gag>That's the good thing about Bitcoin standards, there's so many to choose from</old gag>

[scooterscot]

Cant’t work in modern world

The Bitcoin standard it is then!

[scooterscot]

I'm ready for it... are you?

[AtW]

The gold standard can't return soon enough.

Cant’t work in modern world

[ChimpMaster]

The gold standard can't return soon enough.

Oh dear.

[scooterscot]

The gold standard can't return soon enough.

[rootsnall]

And who was the buyer - BoE?

Yes, this method cuts out the middleman from taking their cut. The banks are quite happy to buy the govt bonds from the govt knowing they can then sell them back to the govt at a profit.

[AtW]

From what I recall, they were at 3x oversubscribed on the last sale.

At least for now, there's nothing to see here.

This is a standard mechanism, a drop in the ocean in terms of amount and the facility was also extended during the last crisis.

And who was the buyer - BoE?

[jamesbrown]

So guilts not selling well then

From what I recall, they were at 3x oversubscribed on the last sale.

At least for now, there's nothing to see here.

This is a standard mechanism, a drop in the ocean in terms of amount and the facility was also extended during the last crisis.

[BrilloPad]

You mean Gilts?

I think the spelling was deliberate.

[ladymuck]

It was called an 'overdraft' on R4 this morning.